31 August 2011

The low priority given to anti-bribery measures in the All of Government Response to Strengthening New Zealand’s  Resistance to Organised Crime, published this month, possibly reflects disbelief that any serious bribery occurs in either the New Zealand commercial sector or in government. As things like that don’t happen here there is no enthusiasm for OECD Anti Bribery Convention measures or need to enact measures needed to implement the UN Convention Against Corruption.

The Response does indicate that agencies will “Develop a national anti-corruption policy covering prevention, detection, investigation and remedy of corruption and bribery across the public sector (including to local government and Crown Entities) and private sector”.

But the scandal associated with Australian Reserve Bank subsidiaries paying bribes to obtain bank-note printing contracts indicates that even blue chip companies trading internationally may subsist on dubious practices.

Media reports about senior staff of the National Broadband Network in Australia suggest that practitioners in the art of bribery are not that far away. The chief executive and chief financial officer at NBN previously worked for Alcatel.  Last year Alcatel had a $137 million fine imposed by a US court after pleading guilty under the Foreign Corrupt Practices Act for its bribery of officials to obtain contracts.

A recognised process is involved.   “It begins as gifts. Then there are payments for introductions. At every step, the dealings are handled by third-party consultants who are paid exorbitant amounts for their services. No one questions what they do with the loot. The model established by Alcatel has been replicated throughout the world, although the modern version involves a more arms-length approach than that engaged in by Alcatel employees, some of whom extracted multi-million dollar kickbacks from their own bribes.”

Media reports comment that there is no connection between the NBN officials and bribery by Alcatel.


NZ response to organised crime August 2011.pdf